Steady dividends support ONEOK

ONEOK (OKE), a diversified energy company with oil and gas production and natural gas processing, gathering, storage and transmission assets, has boosted its payout 10 times over the past half-decade.

Nothing suggests confidence on the part of management than a dividend increase. Not once -- not even during the Great Financial Crisis -- did management cut the payout. And during this time ONEOK is up more than 95 percent in price-only terms.

ONEOK, along with its announcement of fourth-quarter and full-year 2012 results, revised downward its guidance for long-term earnings and dividend growth. This precipitated a 6 percent slide in the share price in late February.

Investors overdid it when they sold off after the guidance revision. They subsequently pushed the stock to a new all-time high in mid-April. ONEOK has backed off again, presenting an opportunity for new investors to establish positions.

First-quarter earnings declined 8.4 percent, as its ONEOK Partners LP (OKS) segment reported a 34 percent profit decline on narrower natural gas liquids (NGLs) price differentials and ethane rejection in its NGLs business.

The partnership's natural gas gathering and processing business was affected by lower realized commodity prices.

But the long-term picture is healthy: ONEOK forecast three-year net income growth of 15 percent to 20 percent and an aggregate dividend increase to 2015 of 55 percent to 65 percent.